Saudi Arabia approves plan to diversify economy from oil

The current slump in oil prices has been putting the squeeze on many oil producing nations. Saudi Arabia, however, has largely been seen as better placed than most to weather the economic hardships—using its vast reserves to ride out the low prices and potentially squeeze out some of the competition in the process.

In the long term, however, not even the Saudis will be able to coast on oil revenue forever. As the world gets more serious about tackling climate change, and as renewable energy and electrified transportation come firmly into the mainstream, it's a fair bet that every oil producing nation will need to diversify its economy or face losing their position in the world.

The BBC reports that Saudi Arabia appears to be well aware of this challenge. In fact, the Saudis have just approved an ambitious plan to shift the nation's economy away from oil: selling off shares in state-owned oil company Aramco to establish a sovereign wealth fund, promoting a broader range of industries and wider participation in the workforce (including women), and potentially also introducing new taxes on items like luxury goods and sugary soft drinks in order to lessen government dependence on oil revenue.

That said, nobody should be under the impression that the oil producers of the world are suddenly going to shift their economy exclusively to solar panel and organic herbal supplement manufacturing either. Included in the newly approved economic reforms is a shift toward mineral mining and military production.

We may be shifting away from fossil fuels. But hippie utopia is still a little ways off...